Category Archives: Economics, Marketing, Policy
Georgia Cotton Commission 10th Annual Meeting Jan. 25, 2017 The Georgia Cotton Commission is pleased to announce the guest speakers at the Commission’s 10th Annual Meeting … Continue reading
To download the guide, click link below. 2016 UGA Cotton Production Guide Produced by the UGA Cotton Team
February Report Not a Valentine to Cotton
February has thus far been a brutal month for cotton prices. On February 9th, USDA released its monthly production and supply/demand estimates. The numbers were not pretty. That report isn’t the only thing hammering cotton right now—but it sure didn’t help and added to the already bearish outlook for cotton. Over the next few months as planting season approaches, we’ll hear a lot about acres and the weather. That’s fine; but cotton’s long-term future is all about demand.Just because prices have taken a tumble does not mean acres will decline. Growers know that LDP’s are available when prices are low—the market isn’t the only signal out there. As we near planting time, relative prices, expected LDP’s, and expected ARC/PLC payments on Generic Base will determine which way acres go.
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Ending the Year With a More Positive Outlook
At present, the outlook for 2016 is much the same as for the 2015 crop. With Dec16 again in the 60’s, this may not convince farmers to plant much cotton. But 2016 corn and soybean prices are not as attractive relative to cotton as this year. Also, let’s not forget that at least ½ million acres intended for cotton in Texas was abandoned or switched to another crop due to rain and delayed planting. Also, the large shift to peanuts in GA may not be repeated to that magnitude due to crop rotation constraints.
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The 2015 Georgia Quality Cotton Awards will be given on January 27, 2016 during the Georgia Cotton Commission Annual Meeting at the UGA Conference Center in Tifton. This will be the 11th year of this awards program to recognize producers and gins of high-quality cotton in Georgia. The awards are sponsored by Bayer CropScience and the Georgia Cotton Commission and administered by the UGA Cotton Team. Nominations are due not later than Janury 19, 2016. For more information, contact your local County Extension Agent. Click on the link below to download instructions and the nomination form.
The 2014 Research and Extension Report is now available. The Report contains results of research conducted by UGA cotton researchers, Extension specialists, and county agents during 2014. To view, download, and/or print the Report, go to the menu in the left margin of this Home Page and scroll down to Cotton Resources. Click on Research-Extension Report.
Cotton Reaches New Lows on Lack of Demand
Don Shurley, Professor Emeritus of Cotton Economics
Undoubtedly, cotton prices are at a fork in the road. Will prices be able to hold the 60-cent level and perhaps eventually recover to move higher or will prices erode further into the 50’s? No one is sure of the answer but most seem to agree that until fresh/new buying appears, it is difficult to stop the bearish tone that has suddenly enveloped the market. There are many negatives out there that currently pressure the market. If all these things work out negatively, prices could indeed find the 50’s. If, however, some of these worries turn out better than expected, prices could recover. What we hope will materialize as a “bounce” or consolidation at the 60-cent level would be the markets way of saying enough is enough—for now.
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September Numbers Not Likely to Move the Needle
Cotton growers continue to wait on anything that would push prices to the desired 70-cent level or better. To date, little marketing or price protection has taken place as producers seem willing to wait it out. After the shocking numbers in the August report, USDA’s September report seemed by most observers to be an opportunity for USDA to “correct” itself. Thus, there has been and continues to be a lot of uncertainty around this market. As we move closer to harvest time, it looks like the September numbers (released last Friday) are not likely to do much in the way of moving prices out of the 62 to 67 cent range we’ve been in for the past 11 months.
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Where Does This Wild Season Now Go From Here?
Don Shurley, Professor Emeritus of Cotton Economics
Prices have been vulnerable to what seems to be a constant barrage of economic and policy forces. Cotton growers, for the most part, have been patiently waiting on prices to reach 70 cents. Given all the factors that have been in play, things could have turned out worse, but so far cotton seems to have weathered the storm. Prices are not where we want them to be but so far we’ve stayed out of the 50’s. This week’s implosion was due to concern over China’s economy, losses in the Chinese stock market, and related fears and concerns that caused the US stock market to also tumble. All eyes continue to be on China mill use and crop size. With the events of this week, everybody is “super sensitive” to China. Sensitivities aside, the same issues still apply—prices will depend on China’s demand for imports (quality cotton more precisely).
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